Lehman summary courtesy of Winter_CFA on the Yahoo SIGM board
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COMPRESSION (et al)...
by: WINTER_CFA 24170 of 24174
The Lehman report on CUBE which came out on Friday uses a some-of-the-parts approach to get a new $71 taget for that stock. It uses Enterprise Value/Share (EV/S) comparisons with GIC, SFA, and HLIT for Cube's Divicom division and with ESST, LSI, ALTR, and XLNX for Cube's Semiconductor division. These values amount to $30.20 and $35.51, respectively, for the CUBE parts. Add $5 in net cash and you get the $71 figure. The EV/S calculation is not disclosed in the report (there are various ways to arrive at an EV/S figure for a firm), but the $71 target amounts to 56.4x and 49.3x estimated EPS for 1999 and 2000, respectively.
Using those P/Es for SIGM (and my EPS estimates of $0.25 and $0.75) would generate comparable targets of $14.10 and $36.98, respectively. May both firms' targets be met! (Note - the "over two Qs" COMPRESSION referred to pertains to several news events which could occur, not the timeframe for the stock objective to be met. If unstated, recommendation timeframes are typically 12-18 months).
PS - Nice to see the new NetStream product introduced. Better performance and higher gross profitability in one swoop. I like.
There with every share.
daniel |
